Podcasting can be profitable, but getting there will take consistency, engagement and effort.
Podcasts are more popular than ever. Not only are more people listening to them, but more creators are launching them. Podcast Insights reports that there are currently more than 1.5 million shows and 34 million episodes. While the space is crowded, and getting more packed each day, it’s not too late to start a show or make money from it. Reaching profitability will take work, though.
In 2008, Wired co-founder Kevin Kelly wrote his iconic “1,000 True Fans” essay, which declared that “to be a successful creator you don’t need millions” of fans or dollars. Kelly proclaimed that to be successful everyone doesn’t have to like your work, but a smaller group of people must love it. This argument holds true in podcasting. John Lee Dumas, author of the how-to The Podcast Journal and founder and host of podcast Entrepreneurs On Fire, concurs. He believes that finding a niche is essential to reaching profitability. 
“To generate sustainable income you need to provide the best solution in your niche,” Dumas says. “If your solution isn’t the best, you’re not niche enough.” This approach has worked well for his show.  “Entrepreneurs On Fire has generated over $100K in net profit for 85 months in a row because we’re 100% committed to this philosophy,” he says.
Dumas’ advice to find a tribe pays off when it comes to ad revenue, which is the main income source for many shows. Podcast advertising network AdvertiseCast reports, “if you have a niche, engaged, and targeted audience, [advertisers] will probably be willing to pay more.” 
For podcaster and So You Want to Start a Podcast author, Kristen Meinzer, an engaged and sizable audience is key to a podcast’s financial success. “My advice is generally to work on your audience size and loyalty first,” she says. “Get people coming back week after week through your outstanding content and smart listener engagement strategies. Then, learn all you can about them.” This knowledge helps with ad targeting. “The more you know about your listeners and the more loyal they are, the more likely you’ll be to get advertisers,” she says. 
Stephen Smyk, SVP of Podcast and Influencer Marketing at advertising agency Veritone One, agrees. He explains that even “if you have a small podcast, you may still be able to attract an advertiser that has a particular interest in reaching a very targeted audience.” But even though Smyk doesn’t necessarily see size as an ad obstacle, the numbers show that without a large audience it would be tough for a podcast to cover costs and achieve profitability from ad sales alone. 
“Pricing for podcast ads are usually done on a CPM [cost per mille] basis, which means that for every 1,000 ad listens, the show will receive a preset dollar amount,” Smyk says. “Currently in podcasting, there is a wide range for CPM based on show content, show quality, host, number of listeners, etc., but a standard range would be between $10 CPM and $25 CPM.” Most podcast episodes don’t even reach 1,000 listeners, though. So how can podcasts make money?
According to Meinzer the hard truth is that the bulk won’t. “Most people in the industry won’t tell you this, but the fact is that the vast majority of podcasts make zero dollars,” she says. But that doesn’t mean it’s not worth trying. It just might take creativity—and effort.
“Most hobby podcasters—and quite a few professional ones—hold on to the misconception that if you make a show you’re proud of, listeners and money will just magically appear,” Meinzer says. “That’s not true. You have to work hard to get those things.” 
Beyond ads, there are several other ways to monetize podcasts. Affiliate marketing, where a host sends listeners to a given site and then receives payment for their purchases there, is one option. But it’s still unlikely to be lucrative unless a show has large listener numbers and/or the product is very expensive and the podcast’s percentage of the sale is high.
For small podcasts that have found their “1,000 true fans,” monetizing through Patreon can be a good bet. Devoted listeners can directly support the creator with monthly contributions, and the show can offer premium content to raise more funds. But Patreon might not be the right fit for everyone. “Some shows don’t feel like asking their listeners to donate, and donations are not always consistent,” Smyk says. 
For most podcasters, getting a strong return on investment will require thinking outside of the airways. This means diversifying the brand’s revenue streams, strategizing long term, and determining how the podcast can support off-air ventures. Many successful podcasters make money from their shows indirectly by funneling listeners to their related services, such as consulting, speaking, courses and books. 
Podcaster, writer and business guru James Altucher labels this approach the “Spoke and Wheel Model.” He advises finding a “core idea,” which would be the wheel, and then creating many “spokes” to support its growth and profitability. His examples of spokes include podcasts, along with books, consulting, courses, newsletters, and products. Altucher emphasizes that each alone won’t—and doesn’t have to—generate substantial revenue, but together they can. 
Creating and maintaining several high quality “spokes” takes time and toil. But that’s the reality of any non-hobby venture. As Meinzer says, “if you want your podcast to be a business, you have to treat it like one.”

Affiliate Marketing As A Business


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